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1. ISSUES PRESENTED AND CONSIDERED
(1) Whether the ex-parte adjudication order passed under Section 73(9) of the CGST/KGST Act, 2017, without the petitioner's participation, warranted interference and remand to provide an additional opportunity of hearing.
(2) Whether the initiation and continuation of proceedings pursuant to the show-cause notice dated 22.05.2024 were barred by limitation under Section 73(10) of the CGST/KGST Act, in light of Government notifications extending limitation.
(3) Whether the availability of an alternative remedy of appeal under Section 107 of the CGST/KGST Act precluded the exercise of writ jurisdiction in the facts of the case.
(4) Whether, in view of the pendency of a Special Leave Petition before the Supreme Court concerning the validity of notifications extending limitation, the adjudication order should be set aside and the matter remitted subject to the outcome of the said proceedings, with appropriate directions on computation of limitation.
2. ISSUE-WISE DETAILED ANALYSIS
Issue (1): Ex-parte adjudication order and opportunity of hearing
Interpretation and reasoning
The Court noted that a show-cause notice under Section 73(1) of the CGST/KGST Act, 2017 was issued following an intimation in Form GST DRC-01A, and that the adjudication order dated 14.08.2024 under Section 73(9) read with Rule 142(5) confirmed demand, interest and penalty on an ex-parte basis as the petitioner had not replied. The petitioner contended that the notices were not received and therefore no reply/documents could be filed. The Court considered that, in these circumstances, and given subsequent developments affecting the legal foundation of the proceedings (i.e., notifications on limitation under challenge), one more opportunity ought to be afforded to the petitioner. The Court viewed that setting aside the ex-parte adjudication order and remitting the matter would enable the petitioner to file replies/documents and secure a fresh decision in accordance with law.
Conclusions
The ex-parte adjudication order was set aside and the matter remitted to the adjudicating authority to pass a fresh order after granting the petitioner an opportunity to file reply/documents and after reconsideration in accordance with law.
Issue (2): Limitation under Section 73(10) and effect of notifications extending time
Legal framework as discussed
The petitioner invoked Section 73(10) of the CGST/KGST Act to contend that the impugned proceedings initiated pursuant to the show-cause notice dated 22.05.2024 were barred by limitation. The revenue relied on Notification No. 13/2022 dated 05.07.2022 and Notification Nos. 9 and 56 of 2023 dated 31.03.2023 and 08.12.2023, respectively, to submit that the limitation period had been extended and therefore the proceedings were within time.
Interpretation and reasoning
The Court recorded the rival contentions on limitation and the reliance placed by the revenue on the aforesaid notifications extending the limitation period, and by the petitioner on Section 73(10) to contend that the proceedings were time-barred. The Court did not undertake a definitive adjudication on the correctness of either position. Instead, it noted that the validity and effect of the said notifications were the subject matter of proceedings before the Supreme Court and that the outcome of those proceedings would have a direct bearing on the issue of limitation and the impugned adjudication.
Conclusions
The Court refrained from deciding the limitation issue on merits. It held that, in view of the pendency of proceedings before the Supreme Court on the validity of the notifications extending limitation, the adjudication order should be set aside and the matter reconsidered afresh after the Supreme Court's decision, with appropriate exclusion of time for limitation purposes.
Issue (3): Maintainability of writ petition despite alternative remedy of appeal
Interpretation and reasoning
The revenue contended that an efficacious alternative remedy of appeal under Section 107 of the CGST/KGST Act was available. The petitioner argued that, since the proceedings were allegedly barred by limitation under Section 73(10) and involved questions linked to the validity and effect of limitation-extension notifications, the availability of an alternative remedy should not bar the writ petition. The Court, having regard to the nature of the challenge (including the limitation issue and the pendency of related proceedings before the Supreme Court) and the fact that the impugned order had been passed ex parte, considered it appropriate to exercise writ jurisdiction to set aside the adjudication order and remit the matter.
Conclusions
The existence of an alternative remedy under Section 107 did not preclude the Court from entertaining the writ petition in the given factual and legal context. The writ petition was allowed, and the impugned adjudication order was set aside notwithstanding the availability of an appellate remedy.
Issue (4): Effect of pendency of Supreme Court proceedings on validity of limitation-extension notifications; remand and exclusion of time
Legal framework as discussed
The Court noted that the petitioner relied upon the pendency of a Special Leave Petition (C) No. 4240/2025 before the Supreme Court, wherein the validity of the notifications extending limitation (including those referred to by the revenue) was under consideration. The Court observed that the validity of these notifications, and the Supreme Court's decision thereon, would have an impact or bearing on the impugned proceedings under Section 73.
Interpretation and reasoning
Taking note that the question of validity/effect of the notifications extending limitation was seized by the Supreme Court, the Court considered that deciding the matter finally at this stage could lead to conflicting decisions and multiplicity of proceedings. To avoid such an eventuality and to ensure consistency with the Supreme Court's ultimate pronouncement, the Court deemed it appropriate: (a) to set aside the impugned adjudication order; (b) to remit the matter to the adjudicating authority to pass a fresh order only after disposal of the said Special Leave Petition; and (c) to provide that the period between the date of the impugned order and the date of disposal of the SLP would stand excluded for the purpose of limitation.
Conclusions
(a) The impugned adjudication orders dated 14.08.2024 were set aside.
(b) The matter was remitted to the adjudicating authority to reconsider the case afresh and pass a fresh adjudication order in accordance with law after disposal of SLP (C) No. 4240/2025 by the Supreme Court.
(c) The period between 14.08.2024 and the date on which the Supreme Court disposes of SLP (C) No. 4240/2025 was directed to be excluded for the purpose of computing limitation.
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